This post by Kevin Cain & Dorie Clark first appeared at Forbes
Over the past few years, while an increasing number of businesses have been using content marketing to attract and retain great customers, most venture capital firms have lagged behind. In an industry where any type of marketing beyond public relations has historically been viewed as unnecessary (just type “venture capital marketing” into Google and see what you get), that’s not exactly surprising.
And yet fast forward to 2013, and things are starting to change. In June, Andreessen Horowitz – the $2.5 billion venture capital firm that has invested in such household brands as Groupon, AirBNB, Twitter, and Skype – hired former Wired Senior Editor Michael Copeland to lead its new content strategy. In an October interview with Pando Daily’s Sarah Lacy, Andreessen Horowitz co-founder Marc Andreessen explained how the firm uses content to foster transparency and to articulate how it thinks about the world. He went on to describe the benefits of doing so, noting how it “gives entrepreneurs a great deal of comfort to already understand us before they walk in the door.”
Andreessen Horowitz isn’t the only VC firm adopting content marketing, or the first. In March, Sequoia Capital hired Ben Worthen, a former journalist for The Wall Street Journal, as its head of content and subsequently created Grove, a content hub where founders and entrepreneurs can share practical advice on topics ranging from product pricing to how to prepare a board deck. Soon after, First Round Capital launched First Round Review while Battery Ventures added Rebecca Buckman, another WSJ veteran, to its payroll to start creating content for the firm and its portfolio companies.
These are just a few high-profile examples from the past year of VC firms that are beginning to devote their time and resources to developing content. While it’s true that some venture capitalists had previously been bloggers, it wasn’t until this year that most began to embrace the so-called “content marketing revolution” in earnest. For an industry that has long eschewed most forms of marketing, the question is why now?
Keeping Everyone Content-ed
While the sudden promulgation of content marketing may just be a matter of keeping up with the Joneses (i.e., if Andreessen Horowitz and Sequoia are doing it, we should be, too), it may in fact be the result of four converging trends:
- Growing interest in content marketing investments. In the past year, some VCs have pumped money into the likes of HubSpot, Kapost, Skyword, and many of the other software-as-a-service (SaaS) businesses designed to enable content marketers. How better to get exposed to the value that content marketing can bring to your own operation than by conducting due diligence on, and ultimately investing in, some of its best service providers?
- The growing need for differentiation. In a challenging environment, VCs are looking for ways to stand out and build their brands, two objectives that well-executed content marketing programs can help achieve. Doing so can pay dividends as firms look to attract limited partners and high-caliber portfolio companies. It also helps shorten sales cycles by giving founders a way to assess whether or not a VC is a good fit for them long before ever picking up the phone.
- The move toward value add. An increasing number of venture capital firms are doing a lot more for their portfolio companies than simply writing a check. VCs are often expected to bring an array of capabilities and expertise to their portfolio companies, including helping them recruit top talent, providing sales and marketing support, creating content for them, and these days, teaching them how to become effective content marketers.
- Exits are taking longer. The reality is that it often takes more time to reach an exit today than it did just a few years ago. By encouraging their portfolio companies to create content, some VCs are giving their portfolio companies a viable way to generate and nurture leads, which will ultimately drive the kind of revenue necessary to bring about an IPO or acquisition.
The bottom line is that content marketing is just another way for VCs to keep portfolio companies, limited partners, and themselves happy, and that’s a winning strategy.
Better Late than Never
VCs may have been slow to get into the content marketing game, but they are a welcome addition. By reinforcing the value of content marketing to founders and entrepreneurs, they are effectively helping to ensure it takes hold with a whole new crop of businesses. The one downside for other venture capitalists, however, is that it means they need to work even harder to make their content stand out and cut through all the extra noise.
Kevin Cain is the Director of Content Strategy at OpenView Venture Partners, which recently published an eBook on content marketing best practices for expansion-stage SaaS companies. Follow him on Twitter at @kevinrcain.
Dorie Clark is a marketing strategist who teaches at Duke University’s Fuqua School of Business. Learn more about her book Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press) and follow her on Twitter.